30 HOUR PA FUNDAMENTALS TEST BANK EXAM
ACCURATE EXAM 850 QUESTIONS WITH DETAILED
VERIFIED ANSWERS (100% CORRECT
ANSWERS)/ALREADY GRADED A+
What is the loan balance called? - ANSWERthe principal
Charging interest in excess of this rate is called __________ or illegal interest. -
ANSWERusury
What is the total dollar amount of interest and points paid by a borrower at closing. -
ANSWERprepaid interest
What are a one-time fee paid at closing to increase the yield to the investor. -
ANSWERpoints
Points give the lender more money up-front so he will be encouraged to make a loan at
a __________ interest rate. - ANSWERlower
The lender is able to make lower interest rate loans, but the buyer must come up with
the point money in ___________ at the time of closing. - ANSWERcash
What is the principal of using other people's money to make investments? -
ANSWERleverage
The ratio of loan amount compared to the value of the property is called the
__________. - ANSWERLoan to Value Ratio
The value in a property held by the owner in excess of any liens against it is called
__________. - ANSWERequity
What is the cost per thousand that is required to create the principal and interest
payment necessary to pay off the loan? - ANSWERa factor
The longer the loan, the lower the __________. - ANSWERinterest rate
What is the order of payment in foreclosure? (4 things) - ANSWERCost of Sale -
advertising, attorney fees, etc.
Special assessment and general taxes are paid after the costs of the sale.
,The first mortgage, which is determined by the order of recording.
Whatever is recorded next
What kind of foreclosure is required to foreclose a Mortgage? - ANSWERjudicial
What kind of foreclosure is required to foreclose on a Deed of Trust? - ANSWERnon-
judicial
Who, in a Deed of Trust, holds "Naked Legal Title" (one without possessory rights), and
can claim the property without going through the courts? - ANSWERthe trustee
What gives the borrower the right to clear up the debt prior to the foreclosure sale? -
ANSWERThe Equitable Right of Redemption
What gives the borrower a certain amount of time after the sale to clear the debt? -
ANSWERThe Statutory Right of Redemption
If the proceeds from the foreclosure sale are not sufficient to cover the debt, the lender
can go to court and seek what 2 things? - ANSWERDeficiency judgment - a general lien
and would apply to all of the borrower's assets.
Deed in lieu of foreclosure - Lender and borrower agree that the lender will become the
owner of the property instead of going through the formal foreclosure process.
What is the promise to repay the debt and a negotiable instrument? - ANSWERa
promissory note (pledge)
What is a long-term note that is not secured by a specific property? - ANSWERa
debenture
The buyer of the property retains the right to use the property exclusively while it is
subject to a __________ or __________. - ANSWERMortgage or Deed of Trust
Both create the collateral for a loan by promising the property in case of default by the
borrower.
In a mortgage, the borrower is the __________, and the lender is the __________. -
ANSWERmortgagor
mortgagee
In a Deed of Trust, the trustor is the __________. The beneficiary is the __________.
And the trustee is __________. - ANSWERborrower
lender
,anyone designated by the lender
Under a Deed of Trust, who holds the promise to repay (Promissory Note) from the
borrower? - ANSWERthe beneficiary (lender)
Who holds the security (Deed of Trust) for the debt. - ANSWERthe trustee
Duties of the borrower in a mortgage or deed of trust: (4 things) - ANSWERPayment of
the debt in accordance with the terms of the note.
Payment of all real estate taxes on the property given as security.
Maintenance of adequate insurance and the property in good repair at all times.
Obtain lender authorization prior to making any major alterations to the property.
What clause applies to If a borrower defaults on the loan, the lender can call the entire
balance due and payable immediately. - ANSWERAcceleration Clause
Allows the interest rate to adjust over the life of the loan. - ANSWEREscalation Clause
What clause applies to when the beneficiary declares the entire balance of the loan due
and payable when the property is transferred? - ANSWERAlienation Clause
What puts on public record that the loan was paid, and that the lender no longer has a
lien on your property? - ANSWERSatisfaction Piece
What clause allows a lender to charge extra interest if the loan is paid off before the
normal completion date? - ANSWERPrepayment Penalty Clause
What clause in a Mortgage or Deed of Trust wherein a subsequent mortgage or deed of
trust takes priority? - ANSWERSubordination Clause
What is the substitution of a third person in place of a creditor to whose rights the third
person succeeds in relation to the debt? - ANSWERSubrogation
What is it called when the buyer takes over the original payment, the original loan, and
the original interest rate of the seller's existing loan? - ANSWERan assumption
When does a "Budget Mortgage or Deed of Trust" occurs? - ANSWERas a result of a
lender requiring tax or insurance escrows
A monthly loan payment consists of what 4 things? - ANSWERPrincipal
Interest
Taxes
Insurance
, If recorded, where must a mortgage or deed of trust be recorded? - ANSWERin the city,
county or municipality where the property is located
What are second mortgages or deeds of trust called? - ANSWERjunior mortgages
The priority of junior liens is determined by what? - ANSWERthe date and time of
recording
In an installment land contract, what type of title did the seller retain? - ANSWERlegal
Under an FHA graduated payment mortgage, which of the following fluctuates over the
term of the loan? - ANSWERmonthly payments
Usury most nearly means __________. - ANSWERillegal interest
An impound or reserve account most benefits whom? - ANSWERthe lender
A buyer assumes the mortgage. How is the owner relieved of the liability? -
ANSWERnovation
The maximum permissible "loan to value ratios" are based on what? - ANSWERsale
price or appraised value, whichever is lower
A rescission clause in a contract provides a purchaser with rescission rights for how
many days. - ANSWER3 days
A mortgage company makes a number of loans to be assembled into one package and
sold to permanent investors. This process is an example of interim financing to the
mortgage company and is called what? - ANSWERwarehousing
__________ interest is the type of interest charged on a mortgage loan, and principal is
the loan balance itself. - ANSWERSimple
In a Deed of Trust the trustor is the __________. When title insurance is required by the
lender (the beneficiary) it is usually the __________ who pays for it. -
ANSWERborrower
trustor
Several kinds of property exist in real estate markets, but in effect, they fall into what
two major classifications? - ANSWERresidential and nonresidential
__________ properties include single-family homes and multiple-family properties such
as apartments, condominiums, and co-ops. - ANSWERresidential
ACCURATE EXAM 850 QUESTIONS WITH DETAILED
VERIFIED ANSWERS (100% CORRECT
ANSWERS)/ALREADY GRADED A+
What is the loan balance called? - ANSWERthe principal
Charging interest in excess of this rate is called __________ or illegal interest. -
ANSWERusury
What is the total dollar amount of interest and points paid by a borrower at closing. -
ANSWERprepaid interest
What are a one-time fee paid at closing to increase the yield to the investor. -
ANSWERpoints
Points give the lender more money up-front so he will be encouraged to make a loan at
a __________ interest rate. - ANSWERlower
The lender is able to make lower interest rate loans, but the buyer must come up with
the point money in ___________ at the time of closing. - ANSWERcash
What is the principal of using other people's money to make investments? -
ANSWERleverage
The ratio of loan amount compared to the value of the property is called the
__________. - ANSWERLoan to Value Ratio
The value in a property held by the owner in excess of any liens against it is called
__________. - ANSWERequity
What is the cost per thousand that is required to create the principal and interest
payment necessary to pay off the loan? - ANSWERa factor
The longer the loan, the lower the __________. - ANSWERinterest rate
What is the order of payment in foreclosure? (4 things) - ANSWERCost of Sale -
advertising, attorney fees, etc.
Special assessment and general taxes are paid after the costs of the sale.
,The first mortgage, which is determined by the order of recording.
Whatever is recorded next
What kind of foreclosure is required to foreclose a Mortgage? - ANSWERjudicial
What kind of foreclosure is required to foreclose on a Deed of Trust? - ANSWERnon-
judicial
Who, in a Deed of Trust, holds "Naked Legal Title" (one without possessory rights), and
can claim the property without going through the courts? - ANSWERthe trustee
What gives the borrower the right to clear up the debt prior to the foreclosure sale? -
ANSWERThe Equitable Right of Redemption
What gives the borrower a certain amount of time after the sale to clear the debt? -
ANSWERThe Statutory Right of Redemption
If the proceeds from the foreclosure sale are not sufficient to cover the debt, the lender
can go to court and seek what 2 things? - ANSWERDeficiency judgment - a general lien
and would apply to all of the borrower's assets.
Deed in lieu of foreclosure - Lender and borrower agree that the lender will become the
owner of the property instead of going through the formal foreclosure process.
What is the promise to repay the debt and a negotiable instrument? - ANSWERa
promissory note (pledge)
What is a long-term note that is not secured by a specific property? - ANSWERa
debenture
The buyer of the property retains the right to use the property exclusively while it is
subject to a __________ or __________. - ANSWERMortgage or Deed of Trust
Both create the collateral for a loan by promising the property in case of default by the
borrower.
In a mortgage, the borrower is the __________, and the lender is the __________. -
ANSWERmortgagor
mortgagee
In a Deed of Trust, the trustor is the __________. The beneficiary is the __________.
And the trustee is __________. - ANSWERborrower
lender
,anyone designated by the lender
Under a Deed of Trust, who holds the promise to repay (Promissory Note) from the
borrower? - ANSWERthe beneficiary (lender)
Who holds the security (Deed of Trust) for the debt. - ANSWERthe trustee
Duties of the borrower in a mortgage or deed of trust: (4 things) - ANSWERPayment of
the debt in accordance with the terms of the note.
Payment of all real estate taxes on the property given as security.
Maintenance of adequate insurance and the property in good repair at all times.
Obtain lender authorization prior to making any major alterations to the property.
What clause applies to If a borrower defaults on the loan, the lender can call the entire
balance due and payable immediately. - ANSWERAcceleration Clause
Allows the interest rate to adjust over the life of the loan. - ANSWEREscalation Clause
What clause applies to when the beneficiary declares the entire balance of the loan due
and payable when the property is transferred? - ANSWERAlienation Clause
What puts on public record that the loan was paid, and that the lender no longer has a
lien on your property? - ANSWERSatisfaction Piece
What clause allows a lender to charge extra interest if the loan is paid off before the
normal completion date? - ANSWERPrepayment Penalty Clause
What clause in a Mortgage or Deed of Trust wherein a subsequent mortgage or deed of
trust takes priority? - ANSWERSubordination Clause
What is the substitution of a third person in place of a creditor to whose rights the third
person succeeds in relation to the debt? - ANSWERSubrogation
What is it called when the buyer takes over the original payment, the original loan, and
the original interest rate of the seller's existing loan? - ANSWERan assumption
When does a "Budget Mortgage or Deed of Trust" occurs? - ANSWERas a result of a
lender requiring tax or insurance escrows
A monthly loan payment consists of what 4 things? - ANSWERPrincipal
Interest
Taxes
Insurance
, If recorded, where must a mortgage or deed of trust be recorded? - ANSWERin the city,
county or municipality where the property is located
What are second mortgages or deeds of trust called? - ANSWERjunior mortgages
The priority of junior liens is determined by what? - ANSWERthe date and time of
recording
In an installment land contract, what type of title did the seller retain? - ANSWERlegal
Under an FHA graduated payment mortgage, which of the following fluctuates over the
term of the loan? - ANSWERmonthly payments
Usury most nearly means __________. - ANSWERillegal interest
An impound or reserve account most benefits whom? - ANSWERthe lender
A buyer assumes the mortgage. How is the owner relieved of the liability? -
ANSWERnovation
The maximum permissible "loan to value ratios" are based on what? - ANSWERsale
price or appraised value, whichever is lower
A rescission clause in a contract provides a purchaser with rescission rights for how
many days. - ANSWER3 days
A mortgage company makes a number of loans to be assembled into one package and
sold to permanent investors. This process is an example of interim financing to the
mortgage company and is called what? - ANSWERwarehousing
__________ interest is the type of interest charged on a mortgage loan, and principal is
the loan balance itself. - ANSWERSimple
In a Deed of Trust the trustor is the __________. When title insurance is required by the
lender (the beneficiary) it is usually the __________ who pays for it. -
ANSWERborrower
trustor
Several kinds of property exist in real estate markets, but in effect, they fall into what
two major classifications? - ANSWERresidential and nonresidential
__________ properties include single-family homes and multiple-family properties such
as apartments, condominiums, and co-ops. - ANSWERresidential
